Malloy warns state's transportation fund in dire situation

Malloy warns state's transportation fund in dire situation

Malloy warns state's transportation fund in dire situation

By SUSAN HAIGH

Dec. 08, 2017

https://www.apnews.com/8499c45d26294b6f842db4c49550ea7a

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HARTFORD, Conn. (AP) — Gov. Dannel P. Malloy sounded the alarm Thursday about the projected insolvency of Connecticut's transportation account, warning the state soon may not have the money it needs to pay for many planned road and bridge improvement projects.

The Democrat said state lawmakers must take steps as soon as possible to somehow replenish the Special Transportation Fund, which has been adversely impacted by a decline in gas tax revenue, a shift to more fuel-efficient vehicles, higher annual debt payments and other factors. If nothing is done, Malloy warned that things from major reconstruction projects to everyday maintenance, including snow-plowing, will be cut back.

"The state's Special Transportation Fund can simply no longer support normal operation or planned levels of capital investment and services. We are at fork in the road," said Malloy, predicting "deep painful cuts" will result if new revenue isn't found for the fund.

The General Assembly is scheduled to reconvene its next regular session in February.

Malloy's administration released a 10-page report that highlights how the Special Transportation Fund is projected be in deficit beginning in fiscal year 2019, with a $38.1 million shortfall. It's expected to grow to $216.1 million by fiscal year 2022, for a cumulative total of $388.1 million over the next five years.

"Those deficit conditions prevent us from selling bonds for transportation," said Department of Transportation Commissioner James Redeker. "That creates an immediate crisis in our ability to pay existing obligations, which is about close to $1 billion for this fiscal year. We have an urgent requirement to fix that problem."

The state typically issues the bulk of its transportation bonds in the first couple of months of the new year.

Without additional revenue, Redeker said the DOT will have to drastically cut expenses. Thursday's report included a long list of projects potentially at risk throughout Connecticut, such as the replacement of up to 200 old commuter rail cars and buses and overhaul of the highway interchange in Waterbury known as the "Mixmaster." In total, Malloy said $4.3 billion worth of capital projects would be cut or deferred.

Malloy also warned of higher bus and rail fares, the closure of all rest areas, staff reductions at DOT and cutbacks in bridge and highway maintenance, including snow-plowing and paving if the funding problem isn't addressed.

The issue of the fund's solvency isn't a new one. Lawmakers have been unable to pass revenue-generating proposals, such as instituting highway tolls or setting aside a small portion of sales tax revenues. But Malloy said the problem has worsened recently.

State Rep. Antonio "Tony" Guerrera, D-Rocky Hill, the House chairman of the Transportation Committee who supports instituting electronic tolls to help raise funds, said lawmakers finally are seeing the potential impact of the fund's insolvency.

"We all have to make a decision here as legislators. Do you want to cut programs? Do you want to cut infrastructure projects? Do you want to raise fares or do you want to look for other sources of revenue," he asked. "This isn't brain surgery here. This is what it comes down to."

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The summary of this story has been corrected to show that a deficit in the Special Transportation Fund is projected to begin in 2019, not 2010.